Rigby v Samson
| Jurisdiction | England & Wales |
| Judgment Date | 03 February 1997 |
| Date | 03 February 1997 |
| Court | Chancery Division |
Chancery Division.
Rattee J.
The taxpayer appeared in person.
Michael Furness (instructed by the Solicitor of Inland Revenue) for the Crown.
Income tax - Losses - Set-off of earlier losses against later income - Claim to set-off losses of furniture business carried on by companies against later investment income - Whether furniture business included investment and was carried on by taxpayer in partnership with companies - Income and Corporation Taxes Act 1988 section 385Income and Corporation Taxes Act 1988, s. 385.
This was an appeal by the taxpayer against a decision of the general commissioners for Cockermouth confirming certain assessments to income tax on him for the years 1989-90 to 1993-94.
The taxpayer wished to set-off against investment income for the years in question losses of a furniture business in earlier years. The furniture business was carried on by two companies controlled by the taxpayer.
The inspector disallowed set-off of the losses on the grounds that losses could not be carried forward and set-off against the profits of a different source of income in later years.
The taxpayer contended that he had traded personally in partnership with the two companies as "investor and furniture manufacturer". He also alleged that the sums concerned were the subject of an agreement entered into between him and the inspector pursuant to the Taxes Management Act 1970 section 54Taxes Management Act 1970, s. 54to the effect that the losses in the furniture business were available to be set-off against the relevant investment income.
The commissioners concluded that there had been no partnership between the taxpayer and the companies and that the taxpayer did not carry on the trade of an investor. The commissioners made no finding as to an agreement under Taxes Management Act 1970 section 54s. 54. The only evidence relating to an agreement concerned the set-off of losses in the furniture business against that business.
Held, dismissing the taxpayer's appeal:
1. There was no material before the court to suggest that, as a matter of law, a partnership had ever existed.
2. It was not open to the court to review the commissioners' finding of fact that the taxpayer had not carried on trade of investor.
3. Any agreement between the taxpayer and the inspector was irrelevant to the appeal.
Rattee J: The appellant, Mr John Rigby ("the taxpayer"), appealed some time ago to the general commissioners for the division of Cockermouth against assessments to tax for the years 1989-90 to 1993-94. Apart from some of the assessments then appealed against, which the general commissioners, at the invitation of the inspector, determined in a nil quantum, the assessments in question related to the investment income of the taxpayer prima facie taxable under Sch D, Case III.
1. There was no dispute before the general commissioners as to the amount of the prima facie taxable income. The taxpayer's complaint before the general commissioners was that, by virtue of Income and Corporation Taxes Act 1988 section 385s. 385 of theIncome and Corporation Taxes Act 1988, he was entitled to set off against that income prior losses which had been made in a furniture manufacturing and retailing business.
Income and Corporation Taxes Act 1988 section 385 Section 385 entitles a taxpayer, subject to certain conditions which are not relevant for present purposes, to set-off unabsorbed losses of a trade in one year against the profits from that trade in a subsequent year. The Revenue's objection to the application of Income and Corporation Taxes Act 1988 section 385s. 385 in the circumstances of the present case was, and is, in essence twofold: (a) the furniture business that suffered the losses in years prior to the relevant years of assessment comprised in the appeals was not carried on in those years by the taxpayer so that the losses...
To continue reading
Request your trial
-
Rigby v Jayatilaka (Inspector of Taxes)
...Subsequently he appealed the decision of the General Commissioners before Rattee J in the High Court in the case of Rigby v Samson 71 TC 153. The learned Judge dismissed the Taxpayer's appeals. The Taxpayer now appears before me to appeal against amendments made by the Respondent Inspector ......
-
Eurofire Ltd v Davison ;Hill v Davison (No 2)
...and on behalf of a company called Euro Fire Ltd, of which he is a director and the principal shareholder) from an order of Lindsay J ([1997] BTC 195) made as long ago as 12 February 1997. The judge's order dismissed the two taxpayers' appeals by way of case stated from decisions of the gene......